Henderson Global Investors has completed a ground breaking project with the launch of its newest property fund, Henderson Caspar. The Caspar Fund combines the tax advantages of holding an equity interest in property assets through an offshore vehicle with a securitisation to give investors flexible risk management and increased liquidity.

The securitisation was managed by Royal Bank of Scotland who selected Caspar as the launch fund for RBS’s new CMBS product, EPIC.

Desmond Jarrett, Client Director for the new Fund commented: “Caspar is the first fund to bring the advantage of the liquidity of the capital markets to property investors. The bonds issued from the Henderson Caspar portfolio are listed and readily marketable thereby ensuring liquidity when and if needed. An investor can select the combination of bonds and equity that suits their risk/reward and liquidity preferences and know that both the bond and equity exposure have the backing of the same quality portfolio. By taking their property exposure through Caspar, investors will have the benefit of liquidity and overcome the delays and expense of trading in direct property.”

The bonds are listed on the Irish Stock Exchange and represent 72% loan to value (LTV). Including the mezzanine finance, also from Royal Bank of Scotland, the gearing for the Caspar fund is c80%. The bonds were rated by Fitch and S&P and just over 50% of the issuance was given an AAA rating. All four tranches (AAA to BBB) were oversubscribed several times.

Jarrett added “The high LTV reflects the benefits of the diversity and quality of the underlying portfolio and the cross-collateralization of the tenancy pool.

“The fund’s gearing, could be considered high but cashflow risk has been controlled by hedging all interest costs and achieving an average spread over LIBOR of just under 34 basis points. T he AAA margin (22 bp) matched the previous tightest level ever seen for a Sterling CMBS deal and each of the other tranches, and Caspar achieved the tightest Sterling CMBS pricing ever seen

The underlying portfolio is 61 commercial property assets in England and Scotland with a broad sector spread*. Total value of the portfolio supporting the securitisation is £737 million. The equity vehicle is a Jersey Property Unit Trust (JPUT) with a life of 8 years. The Caspar Property Fund will have an absolute return target. Henderson will be offering the opportunity for investors to acquire units (c£60